Here’s what the economy could look like with a Harris or Trump presidency

Housing costs present a major challenge for both Harris and Trump as millennials and Gen Zers are priced out of many markets.

The state of the housing market can be summed up by two compelling statistics.

A Gallup survey of 1,001 adults released in May 2024 showed that only 21% of Americans said it was a good time to purchase a home, while 76% said it was a bad time to buy one.

Millennials will play a crucial role this November as voters in their 30s and early- to mid-40s with growing families cannot live in the communities where they grew up because of the scarcity of available homes and elevated costs.

Affordable housing has been a top concern for Harris, who’s aware of the saliency of an issue that could make or break her White House bid.

The current 30-year fixed-rate mortgage is currently under 7% — with rates having fallen in recent months — but many potential buyers simply aren’t purchasing homes and are continuing to rent.

For decades, housing has failed to keep up with demand. After the Great Recession and throughout the COVID-19 pandemic, the problem only grew worse. Now, many would-be sellers have decided to stay put, exacerbating a housing shortage that has become one of the most pressing public policy issues on the local, state, and federal levels.

In the swing state of Nevada, which Harris is hoping to win this fall, Biden earlier this year spoke about the administration’s efforts to tackle the housing crisis, including the 1.7 million housing units currently under construction. He also noted that the administration planned to create an additional 2 million affordable homes, with thousands of the units poised to be built in the Silver State. However, there’s no official timeline for when these homes will be completed.

Harris during the debate said that if elected, she would work with builders and the private sector to construct 3 million new homes by the end of her first term.

Housing affordability will also be a key issue in other battleground states including Arizona, Georgia, North Carolina, and Pennsylvania.

The Biden-Harris administration last year also called for more office-to-residential conversions, adding that it would create a program to “help communities build and renovate housing or convert housing from empty office spaces into housing.”

Such conversions have become increasingly popular in recent years. With legions of employees able to work remotely during the pandemic, many companies have opted to not renew their office leases.

As part of Harris’ economic agenda, she’s proposed a $25,000 tax credit for first-time home buyers, which she reiterated her support for during the debate. As part of Harris’ pledge to create an “opportunity economy,” she also touted a $6,000 child tax credit proposal that she said would help young families purchase necessities like cribs and clothes for their children.

Trump has also zeroed in on the issue of housing. While campaigning in Iowa last year, he said that the key to driving down housing costs was to lower energy costs.

“We’ll get the prices way down,” he said, referring to energy costs, “and then the interest rates down and then the home builders will start building again.”

Trump’s record on affordable housing has been mixed. In 2019, he created a White House council to remove impediments to the construction of affordable housing. But during his presidency, Trump also called for major cuts to the Department of Housing and Urban Development’s budget. In 2020, he sought to end the Community Development Block Grant program — which offers annual grants to states and local municipalities to fund redevelopment and community services — in the next year’s budget, arguing that housing policies were best handled at the state and local levels.

A second Trump term would likely mean the federal government would be more hands-off in shaping housing policy than a potential Harris administration.

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The US is not returning to a pre-2016 trade consensus, that much is clear.

Trump dramatically shifted the Republican Party away from its largely held belief that free trade would help all nations. Harris has said she is not a “protectionist Democrat,” but she was also one of less than a dozen lawmakers who opposed the ratification of Trump’s largest trade achievement, the rewriting of the sweeping North American Free Trade Agreement into the US-Mexico-Canada Agreement or USMCA.

Unlike Biden and Hillary Clinton, Trump’s two previous general election opponents, Harris doesn’t have a lengthy history on trade issues, making it more difficult to tie her to NAFTA and China’s admission to the World Trade Organization, two historic moments that Trump has sharply criticized both parties for participating in.

According to The New York Times, Harris has said she would have opposed NAFTA in 1992. When she voted against the USMCA, she cited the agreement’s failure to grapple with climate change. She was only one of 10 senators to vote against the deal. The United Autoworkers, a powerful labor union, cited Harris’ opposition to USMCA in its endorsement of her over Trump.

Biden’s White House has signaled that it favors a paradigm shift. The administration’s focus is best seen in one of Biden’s biggest trade shifts: withdrawing US support for digital trade principles that some progressive lawmakers, including Sen. Elizabeth Warren, say were hijacked by Big Tech companies. Other Democrats have criticized the administration’s approach.

Biden has left some of Trump’s tariffs in place, illustrating the protectionist bent that continues to take hold in Washington.

Overall, Trump’s combative trade policy led to mixed results. He didn’t see the fruits of his biggest trade deal, which went into effect in July 2020: the USMCA. Experts at the Brookings Institution have praised the treaty for growing regional trade. Unlike NAFTA, the USMCA also contains new provisions on digital trade and labor protections. The Biden administration has used the deal to push Mexico over its labor practices.

While Trump has bragged about brokering a historic trade deal with China, economists found that Beijing never lived up to its commitment to purchase an additional $200 billion worth of US exports. He successfully ended US support for the TransPacific Partnership, a massive trade deal that President Barack Obama supported with the hopes it would align much of the region more closely with the US. Trump has pledged to kill the Biden administration’s new Asian trade talks, which the former president has dubbed “TPP two.” Harris opposed the initial Transpacific Partnership deal, citing at the time the potential for the sweeping deal to undermine California’s environmental laws.

Some Trump allies have signaled that he’ll push the envelope even further if he wins in November. Politico reported that some of the former president’s top economic advisors are discussing how to devalue the dollar to boost US exports. It’s a risky proposition, as it could drive up the costs of some items that have already risen because of inflation.

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